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Viacom Stock Hits High as Ad Growth Returns, CEO Calms Netflix Fears

"We continue to see the digital distribution arena as a growing opportunity," says Philippe Dauman.

Viacom's stock hit a new high in early Wednesday trading as Wall Street cheered the entertainment company's return to advertising growth at its cable networks unit.

On a conference call, CEO Philippe Dauman also addressed concerns about digital licensing revenue after Netflix recently said it would not extend a content deal with Viacom outright, but only renew select programming.

Viacom has enough financial visibility to confirm its affiliate revenue, including streaming video revenue, would grow 10 percent this fiscal year, he said. "We continue to see the digital distribution arena as a growing opportunity and complementary to what we do," Dauman told analysts on the call.

Viacom's stock hit a new 52-week high of $69.08, which is also its highest price since the separation of CBS Corp. at the start of 2006. As of 10:50am ET, the stock was up 3.9 percent at $66.50, giving the company a market value of $29.4 billion.

Viacom earlier in the day had said in its fiscal second-quarter earnings report that its U.S. and worldwide ad revenue each rose 2 percent in the latest quarter. Most analysts had predicted flat results or slight declines after drops in recent quarters and a return to growth only in the current quarter.

Morgan Stanley analyst Benjamin Swinburne also lauded the "Earlier Than Expected Return to Ad Growth" in the title of his report.

"Likely driven by sequential improvement in Nickelodeon ratings and improved demand among key advertising verticals for Viacom's cable networks, domestic ad growth of 2 percent was ahead of our/ consensus expectations of down 1 percent," he said. "As favorable year-over-year ratings compares at Nick continue through the second half of the fiscal year, it is likely that there is upside to our 3 percent fiscal third-quarter domestic ad growth estimate."

Further addressing digital content licensing, Dauman said Viacom is set to reap financial benefits even after its Netflix program deal expires in the coming weeks. "We’re still in discussions with Netflix…and with others,” he said on the call. "We are open to licensing content, some of it on an exclusive basis."